Amritsar – ISB Mohali today conducted a highly interesting and informative Session on ‘Future of Manufacturing in Punjab’ held as part of CII Destination Punjab, a 4 Day Expo organized by the Confederation of Indian industry at Ranjit Avenue, Amritsar. The objective of this Session was to inform, and possibly provoke, a debate on ‘next steps’ for investment in Punjab by industry and by government.
According to Professor ManMohan S. Sodhi, ISB Mohali and Cass Business School, London, “According to a study done by ISB which examined the manufacturing survey data (Annual Survey of Industry) over the periods 1998-2000 to 2007-08 and compared Punjab to Andhra Pradesh, Gujarat, Haryana and Maharashtra, Punjab had not keeping up with these states in several aspects during those years at first sight. However, in the later years 2004-08, Punjab showed momentum in manufacturing and thus provided further opportunities for investment.”
Mentioning about key facts, Professor Sodhi stated that Punjab leads in the growth of number of factories but trails in the growth of total manufacturing Income. The factories in Punjab were typically smaller than the other four states based on comparison of average Invested Capital and Number of Employees. The Net Value Added grew at a healthy 10.9% pa over these years and Net Value Added per Employee grew 5.1% pa but the other states fared even better with their large Industries. Profits per factory rose steeply over 2005-08, but even in 2007-08, trailed those of the other four states “
Giving details of the employment scenario, he said, “Total Employment in manufacturing rose a whopping 13% pa over 2003-08 but is still lower than that in AP, Maharashtra and Gujarat as of 2007-08. Manufacturing Wages per employee in Punjab were on a slight upward trend since 2005 but continue to be less than the four benchmark states in 2007-08; a plus for investors but may also indicate lower skills or fewer opportunities, which makes it ideal destination for setting up industries.”
Talking about the invested capital, Prof. Sodhi stated that “Invested capital was concentrated on a few industry segments: Of the 53 industry segments, 5 consumed over 50% and 13 consumed over 80% of Invested Capital in FY 2007-08 The ratio of Income to Invested Capital rose steadily, growing to 30% in 2007-08, and thus to the middle of the five benchmark states Both Income and Invested Capital show big changes year-on-year and across the manufacturing sub-sectors, reflecting uncertain returns. The ratio suggests a possible need for re-prioritization,” he added.
He mentioned that ISB was keen to work with Industry, government and academia to further refine this data and identify growth opportunities in the State..